FedEx (FDX) Stock Drops 7% After Earnings Beat — Here’s Why Investors Aren’t Buying It

TLDR

• FedEx fell 7.6% in premarket to $293.12 despite beating Q4 earnings and revenue expectations
• Q4 revenue hit $25B with adjusted EPS of $6.31, topping analyst estimates of $24B and $5.96
• Full fiscal year adjusted EPS came in at $20.24, beating the $19.86 analyst estimate
• Calendar year 2026 EPS guidance of $16.90–$18.10 disappointed investors used to higher figures
• The June 1 freight spinoff reduced FedEx’s stock price by roughly $80/share and complicates year-over-year comparisons

FedEx beat Wall Street’s Q4 estimates on both earnings and revenue, and investors sold the stock anyway. FDX dropped 7.6% in premarket trading Wednesday to $293.12, after closing Tuesday’s regular session down 3.5% at $317.24.

FedEx Corporation, FDX

Q4 revenue came in at $25 billion, beating the $24 billion analyst consensus. Adjusted EPS of $6.31 also cleared the $5.96 estimate. For the full fiscal year ending May, adjusted EPS landed at $20.24, ahead of both the $19.86 analyst estimate and FedEx’s own guidance range of $19.30 to $20.10.

So why the selloff?

The company shifted to calendar year reporting and issued its first guidance on that basis. It now expects 11% revenue growth versus 2025 and adjusted EPS of $16.90 to $18.10 for the calendar year ending December 2026. That’s a step down from the $20.24 fiscal year figure, and analysts haven’t yet rebuilt their models to make clean comparisons.

Freight Spinoff Changes the Math

On June 1, FedEx spun off its trucking unit, FedEx Freight, into a separate company. Shareholders received one share of FedEx Freight for every two FedEx shares held. That transaction effectively knocked about $80 off FedEx’s stock price, which was trading near $411 at the end of May.

The spinoff strips out what had been a profitable but increasingly problematic division. When FedEx last reported in March, the freight unit contributed $1.991 billion of the company’s $24 billion in quarterly revenue.

Melius Research, which rates FDX a buy, described the post-spinoff company as “a cleaner, more focused parcel business,” adding that freight “had become a clear headwind to overall profitability.”

Margin Pressure in the Core Business

The cleaner structure comes with a catch. The operating margin in FedEx’s Federal Express segment slipped to 7.7%, down from 8.4% a year ago. Higher costs for employee salaries, benefits, outsourced transportation, and fuel all contributed.

Volumes have also taken a hit from the removal of duty-free “de minimis” treatment for low-value e-commerce shipments linked to Chinese sellers like Shein and Temu. Changing U.S. trade policies and rising fuel costs tied to the Iran conflict have added further pressure.

FedEx Freight, now trading separately as FDXF, was up 3.44% on Wednesday. UPS, which faces some of the same volume headwinds, slipped 1.31%.

FedEx currently trades at 14.68 times projected 12-month forward earnings, just ahead of UPS at 14.05.

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